How to build a sales performance management strategy
If you’re keen to boost the efficiency and effectiveness of your sales team by going down the sales performance management (SPM) route, then having a strategy to help you get there is key.
But before embracing SPM as a discipline and introducing software tools to help support and reinforce good practice, it is vital to consider eight key factors. These considerations will help you clarify your thinking and ensure that you don’t simply end up shooting around in the dark, trying to hit goals but not really knowing what you’re aiming at or where to find them.
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- Understand your own management style. So, for instance, do you believe that most people will perform if allowed to take responsibility for their own actions or is it necessary to chivvy them along? Do you tend to focus on systems and processes or are you more into building up a supportive relationship with members of your team? Knowing yourself will help to make you a better manager by giving you the necessary insights to play your strengths and minimise your weaknesses.
- Have a clear vision of where you want to go and communicate it clearly. Statements of vision will act as a rallying cry for your team, stakeholders and customers and help them understand what your overarching aims are.
- Be clear what results you want to achieve. This means, for instance, not only understanding your sales targets, but also knowing what percentage should come from new products and services or high rather than low margin offerings.
- Set measurable objectives. In order to hit your sales targets, ask yourself how you intend to do it, for example, by increasing sales to the fast-growing pharmaceutical sector by 30%.
- Measure activities that reflect your goals. So if your objective is to increase sales among firms in the manufacturing sector, rather than focus on how many prospecting calls each staff member makes each day, it might make more sense to concentrate on how many new customers they have visited over the course of a week.
- Schedule a regular calendar of events. Put a series of regular events in place so that everyone in the sales team knows what is going on and what the routine is - and stick to them. These could include weekly operations reviews, monthly pipeline and forecasting meetings, quarterly joint customer visits and the like.
- Adopt a coaching and mentoring approach to staff. Rather than simply ask a given individual who appears to be struggling if they have hit their numbers this month, question them about the activities they are undertaking, whether they are appropriate and whether they require any support from you.
- Hold people accountable for their own performance. Rather than simply take over the sales process from a low-performer, thus disempowering them, support them by helping them to find ways of closing the deal successfully themselves.
The problem for many sales managers in adopting this approach, says Helps, is that all too often they are “unclear what good looks like”. “Sales is too often run as an art rather than a science,” he continues. “If it’s done well, it tends to be an instinctive thing and not much has been written down over the years in terms of guidelines.”
Sales is too often run as an art rather than a science.
As a result, it is important that managers take the time to reflect and think about the bigger picture in terms of what they are trying to achieve and how. In fact, research undertaken by Harvard Business School and the HEC Paris business school last year found that if any knowledge worker reflected for as little as 15 minutes at the end of each day on what had happened and what they had done, their performance improved by a staggering 23%.
But while it may be possible to get a long way with good management techniques, software tools can also prove useful in helping managers to encourage and reinforce positive, consistent behavioural change among their team members based on hard data rather than gut feel.
Although many small and medium-sized organisations successfully employ CRM systems to manage their sales processes, dedicated SPM suites of varying levels of maturity and functional breadth have also emerged from an amalgam of different point solutions over the last 10 years. These systems are implemented predominantly by large corporates, which often start with the incentive compensation management side of the equation as it is generally the single biggest issue but also the easiest one to fix.
Other potential applications include recruitment, lead management, learning management and sales analytics, with the aim of helping sales managers take a more holistic view of their sales organisation’s activities.
But as Michael Connor, chief executive and founder of sales management software provider SalesMethods, points out, introducing such systems and the processes that support them necessitates implementing a significant change management programme, which likewise needs to be planned for and included in strategic goals.
“It’s about taking a mid-to-long term view of around one to three years, otherwise the initiative will fail as it’ll be too short-term,” he says. “So you need C-level commitment and buy-in from stakeholders if you’re going to make it work.”
The ultimate goal, however, is to harvest data and obtain a more objective view of what is happening in the sales pipeline so that managers can use the information “to make better informed decisions”. Such insights will also act as the basis of their coaching and management practice, an important feature of SPM, as it is “where the rubber hits the road” in terms of bringing about behavioural change.
“If you use data to gain insights, you can establish why, for instance, this guy is taking longer to close deals than that one and coach them to help improve performance,” advises Connor. “So on the one hand, it’s about change management and understanding what that is, but it’s also about the maturing role of the sales manager too.”